The Adaptive Path acquisition by Capital One is big news for both clients and UX firms.

It means user centered design matters on a strategic business level. In San Francisco, design agencies being acquired by tech companies have become a common story, with clear synergies between tech and design thinking. Remember Facebook acquiring Hot Studio last year? On a more singular note, more recently RISD president John Maeda departed to become the first design partner at VC Kleiner Perkins, presumably to help provide vision to their funded startups. But a bank buying a UX firm is a tad unexpected. For those of us who make a living under the banner of UX design, last week’s acquisition of renowned UX consultancy Adaptive Path by Capital One, raises many questions. What does it mean when an established bank decides to bring one of the leading UX design firms in-house? What is the motivation for a group of UX innovators to take themselves off the market? What does it mean to the rest of us who still need to sell our talents in a field that is ever changing?

Why does Capital One want Adaptive Path?

Even before Capital One acquired Adaptive Path, the bank started the process of building its own internal UX and product design group Capital One Labs, hiring the likes of Dan Makoski, former Google design innovator, as VP of design at Capital One. According to Adaptive Path’s Chief Creative Officer Jesse James Garrett in his post announcing the acquisition, “They’ve already laid the groundwork. They’ve built sophisticated practices in digital product design, design thinking, and experience research and development that we can build on and cross-pollinate with our own practices.” But why not just hire Adaptive Path as their UX consultancy? There seems to be several possible reasons. One is that Capital One seeks to turbocharge their product design team and don’t want to waste time hiring up. Even more attractive is bringing on a whole team who know each other well and have a history working together successfully. Another strategic reason is that this removal of a seasoned pool of UX talent from the market could slow down competitors who could – until last week – turn to Adaptive Path for help. This comes at a time when UX talent is in extremely high demand and low supply, driving programs like CCA Interaction Design that endeavor to churn out young UX designers who are quickly being snapped up by tech companies in the Bay Area. Smart move Capital One. Do I hear a checkmate? I honestly think Capital One is one hell of a smart company to make this move and applaud them for making a good choice. I may even change banks!

But why would Adaptive Path want to go in-house?

Web designers of a “certain age” remember Garrett’s 2002 book The Elements of User Experience and how it so succinctly defined user centered design. That book drew our attention to the company Garrett founded like a moth to light. What a cool, smart company Adaptive Path is, I said to myself. Man, I sure would like to start a company like that, I said to myself. But the idea that a design consultancy would want to be folded into a large corporate bank seems to go against the very nature of the consultant. Recently talking to a former founder of a digital agency that was acquired by a large Silicon Valley tech company, he told me that the thing he misses the most is his clients listening to his advice and really caring what he had to say. And not being just another smart voice on the corporate team. Anyone who has worked both sides of the fence knows the difference, admittedly some corporations are better than others in supporting innovation and design thinking. However, it’s important to remember that the trend of web teams going in-house has been happening for several years now. Digital and product design are now seen as core competitive advantages for many “good” companies and I don’t just mean tech’s Google, Apple, and Facebook. Now a bank like Capital One has woken up to the value of design. I think this is the main reason Adaptive Path has chosen to join a bank and effectively leave the market, as fun-filled and adventure-packed as it is. I think they see a natural progression towards being a part of making big change in an industry that is hot, hot, hot in terms of UX design, and in need of a lot work. Capital One is a good bank and now they’re going to be a better one. Adaptive Path is going to be a part of this in a big way, they hope and I do, too.

What does this mean to the rest of us?

Simply said, it’s open season on UX consulting. We can’t help asking ourselves, who is going to be the next UX firm to step into Adaptive Path’s shoes? While there are a plethora of web agencies in town with UX on the billing sheet, there’s a real vacancy in terms of focused and dedicated UX practices. What you do see is a collection of smaller UX teams catering to startups. But nothing in terms of the experience and leadership that Adaptive Path brought to the table. So there’s a clear opportunity for firms like iiD to engage companies in real need. And now finance companies will need our help more than ever, thanks to Capital One. It will be important for design companies to clearly explain what they can do and of course let their work speak for itself. And on that note, here’s some work we did for ADP.

The Adaptive Path acquisition by Capital One is big news for both clients and UX firms. It means user centered design matters on a strategic business level to a company as bottom line driven as a bank. It means there’s again a shift towards in-house to do big, meaningful work. Lastly, it means there’s a big responsibility for one or more UX firms to step up and carry the torch, to lead with good design that is useful and meaningful to users while supporting business goals. Whatever it means, it shows UX matters.